ANÁLISIS DEL SISTEMA TERRITORIAL

The rapid development and emergence of Chinese renewable energy companies has been widely acknowledged. The questions investigated in this section were whether Chinese renewable electricity companies in the wind power, solar PV and SWH sectors have leapfrogged in development, by what means they have achieved their leapfrogging, and what the future

potential for further leapfrogging is.

The findings suggest that some levels of technological leapfrogging occurred, at least among the leading Chinese companies, especially over the last five years. Two main aspects have been most important for Chinese companies to achieve this leapfrogging. The first is the acquisition of foreign know-how, in many cases through licensing of technologies from foreign companies, in the case of wind power particularly German companies, to gain more advanced manufacturing capabilities. While the conditions of these initial licensing arrangements have not always been the most favourable for Chinese companies, they have enabled Chinese companies to pass through early development stages in a relatively short number of years - something that has taken foreign companies decades to achieve. These developments can be classified as leapfrogging, although Chinese companies are still catching up with western market leaders. As Chinese companies show themselves to be emerging as competitors on the international market, foreign companies have become increasingly reluctant to even license their technologies, not to speak of entering into joint ventures. If Chinese companies want to leapfrog ahead of their western competitors, reach the top level of the global markets in terms of product quality, they cannot continue to rely on acquisition of technological know-how from overseas companies, but need to develop their innovative capacity.

The second driver has been government policies which strongly support and protect Chinese domestic companies and enable them to increase their domestic market shares. Various policy frameworks supporting development of Chinese companies have already been put in place, especially for those in the renewable electricity sector. Although low-carbon innovators, including SMEs, are considered key national assets, they are still in need of significantly greater support from policy, particularly to increase their innovative capacity. The challenge for China's innovation policy is to promote innovation in small and medium sized enterprises, as well as to support research into renewable and indigenous materials and technologies that are not considered 'high tech'.

An example here is wind turbine blades from bamboo which, as indicated, has significant potential to reduce environmental impacts from wind blade production, but in some cases have been held back by quality control risks and technical capacity constraints. Policies that effectively supported the existing competitive strengths of businesses driving disruptive low-carbon innovations would expedite a low carbon systems transition in China.

Governments, through bilateral cooperation agreements and public-private partnerships involving companies and research institutes, have in some cases taken the role as brokers between the different sectors of the Chinese economy and western companies. This has to some degree improved the situation regarding IPR protection and providing a basis for joint R&D programmes. Especially EU countries have been engaged in this cooperation for quite a number of years already.

7 Renewable electricity developments in China's cities

Cities in China will be crucial in deciding the direction of China‘s energy transition and play a key role in China‘s sustainable future. Already over 170 cities in China have populations of over 1 million people, and the world‘s first mega-city, comprising Hong Kong, Shenzhen and Guangzhou, is home to about 120 million (UN Habitat 2008). Over the next two decades over 325 million people will migrate to the cities and by 2030 China‘s cities are expected to house about 1 billion people (McKinsey Global Institute 2009). In 2005 about 40 percent of the country‘s population was classified as urban – by 2050 it is expected that China's urbanisation rate will be about 70 percent (UN Habitat 2008). To accommodate for this large number of people, over the next two decades China will add some 40 billion square metres of floor space, which means doubling the existing floor space – adding the equivalent of ten cities the size of New York (McKinsey Global Institute 2009)

China's provincial capitals and large municipalities are often viewed as cities that set urban development trends for new technology and policies. These cities also take the lead in the implementation of key policy measures in urban building energy efficiency and climate change mitigation. A study by the Global Carbon Project (Dhakal 2009) shows that the 35 largest cities in China represent less than one-fifth of China's population but produced about 40% of the nation‘s GDP, consume 40% of the total commercial energy of the nation and emit CO2 at similar levels.

The wide disparity between these cities and the rest of the country in per capita GDP, per capita energy consumption, and per capita CO2 emissions shows the influence of large cities to shape national energy and carbon profiles. The study also looked specifically at of the four mega-cities of China: Beijing, Shanghai, Tianjin, and Chongqing. It revealed that energy use and CO2

emissions have increased several-fold, with the growth of the tertiary sector contributing to the most in the last two decades. While the average per capita urban energy use and CO2 emissions

in many of China's cities is still relatively low, as in the case of Chongqing (3.3 tons/person), in the case of key cities such as Beijing (11.9 tons/registered person), Shanghai (16.7 tons/registered person), and Tianjin (12.4 tons/registered person), emission levels have already reached or even exceeded those in developed country cities. These cities represent rapid urbanisation trends, the accelerated changes in technology, lifestyle, and societal transformation and demonstrate that urban development will increasingly determine China‘s energy uses and CO2 emissions for the next few decades.

To counter unsustainable urban development trends many Chinese cities have begun taking action, including in the area of renewable electricity. Although most regulatory frameworks for national renewable electricity development and emission reduction targets are set by the central government, it is largely up to local mayors to design effective policy instruments to achieve low-carbon urban development. The move towards creating low-low-carbon cities has become a new slogan not only among cities worldwide but also in China. However, most mayors and city planners generally lack access to the knowledge, experience and financial resources to implement such changes. Yet there are some inspiring examples that show how Chinese cities have begun leapfrogging in terms of renewable electricity. Many municipalities are setting targets for future shares of renewable energy in government energy consumption or total city consumption, often in the 10–20 percent range. Many cities are enacting policies to promote solar PV and SWH in particular. Others are promoting industrial development zones for renewable energy businesses or are conducting urban planning that incorporates renewable electricity technologies and building codes for energy efficient housing.

The rapid expansion of renewable energy generation technologies in China is to some extent due to policy flexibility at city level. Some local municipal actors have demonstrated the ability to realise an energy transition on a local level in a relatively short time through innovative policy and regulation, much faster than provincial governments or China as a whole. At the end of 2009 a first inter-city energy conservation and emission reduction manifesto was jointly signed by

mayors of 40 Chinese cities, proposing to take joint action to support achieving the national emission intensity target of reducing carbon dioxide emissions per unit GDP by 40%-45% based on 2005 levels, particularly through renewable energy development (China CSR 2009).

In most cases fulfilling these targets will be accomplished through a variety of policy strategies, e.g. by providing incentive frameworks for renewable energy companies or promoting the installation and diffusion of renewables. Another development that would contribute to renewable energy development in cities is a plan involving major Chinese cities in emission trading schemes (McGarrity 2010). In the following section several short case studies of cities are presented, which have either already managed a relatively fast diffusion of renewables and/or created renewable energy industry zones, or are in the process of setting up policies to enable an energy transition. A shift to renewable electricity supply for cities will be an important aspect of creating sustainable cities; however, other sectors need to be considered additionally to achieve the creation of sustainable eco-cities.

This chapter will also discuss some developments for vehicle electrification of urban transport sectors and the interdependency with renewable electricity technology deployment.. The last part of the chapter focuses on some of the international partnerships and initiatives which have formed in recent years trying to support the creation of eco-cities in China.